HOA

Victorville West Limited Partnership (“Victorville”) purchased the Inverrary Golf Course and Clubhouse within the Inverrary community in Lauderhill, Florida, in 2006. Victorville acquired the property subject to a restrictive covenant that became the subject of a lawsuit that the Fourth DCA recently ruled could not be canceled because it remained a substantial benefit to the surrounding homeowners.

Restrictive Covenants

When a person or entity purchases property, the property may be subject to a restrictive covenant that limits the purchaser’s use. The most common example is the restrictions provided by the declaration of covenants, restrictions, and easements that a homeowner’s association enforces within a residential neighborhood.

In recent years, Condominium and Homeowner’s Associations have become a target for negligent security lawsuits and claims. Typically, a resident or guest of an Association is a victim of a violent crime and the crime victim later sues the Association. While we discussed this previously, we wanted to provide an update after speaking with Henderson Franklin’s premises liability litigation partner, Traci McKee, for additional thoughts on what Associations can do to reduce liability.

Can property owners be liable for the criminal acts of third parties?

Unfortunately, the answer is “yes.” In a negligent security claim, the crime victim claims that the Association failed to implement reasonable security measures which would have prevented the crime. In most instances, the injury to the victim is severe resulting in a large potential exposure to the Association.

Under Florida law, landowners, including Associations, owe residents and guests a duty to take reasonable steps to protect against foreseeable crimes. Whether an Association’s safety measures were reasonable is typically a question for a jury. To determine whether a particular crime was foreseeable usually depends upon multiple factors such as past crimes at or near the property, and an Association’s knowledge of dangerous propensities of an individual.

With the turnover of volunteer homeowner’s association (“HOA”) board members over time, it is not surprising that certain important long-term issues may be overlooked. There is one very important law, however, which board members may not be aware of that can eliminate an HOA’s ability to enforce its restrictions.

I am often contacted by an HOA board at the last minute before their restrictions “expire” under this law and even sometimes after they expire. Below is a breakdown of the two different processes an HOA must follow to preserve the restrictions before they expire or, if the deadline has been missed, to revitalize the restrictions.

What is the law and why?

The Marketable Records Title Act (“MRTA”) is a Florida law designed to eliminate “stale” recorded claims that affect the title to real property, such as old recorded leases for which the beneficiaries have long departed or dissolved. Without MRTA, all of these documents still have to be shown on title commitments and policies even though they may have long since become irrelevant and unused. Unfortunately, there isn’t an exemption to save old (and still active) association covenants unless the affirmative steps are taken to preserve them.

What does it mean to HOA’s?

Beginning July 1, 2017, Florida community associations will have to comply with more burdensome estoppel requirements.

The 2017 Florida legislature just recently passed a new law that will require associations to comply with a request for an estoppel certificate within 10 business days. If they fail to do so, they will forfeit their right to charge a fee for the preparation and delivery of the document.

Furthermore, the fee that an association may charge is now strictly regulated. The fee is capped at $250 if there are no delinquent amounts owed to the association for the applicable unit or parcel, or $400 if a delinquent amount is owed. However, associations may charge an additional $100 if an expedited request is made, and the association delivers the estoppel within three (3) business days after the request.

In addition to the changes to the timeframe and fees related estoppel certificate issuance, the new law will require associations to provide more information than previously required. Associations will have to provide, among other things, information about parking or garage spaces, any open violations noticed to the owner or mortgagee, and contact information for all insurance maintained by the association.

While the law appears strict on its face, the intent behind the law is to provide more uniformity to the estoppel process in order to help buyers and sellers expedite their closings.

If you or your association have any questions about this new law, please give me a call at 239- 344-1231 or email me at michael.lehnert@henlaw.com.

The Cape Coral Building Department has had a rule on the books requiring owners of residential condominiums in Cape Coral to have a letter from their association before pulling a permit to do work in condominium common areas.

You might be thinking “I pulled a permit for something like that 3 months ago, and I didn’t have a letter. Did I miss something?” To answer your question, nope, you’re fine.

Although the rule is old, the Cape Coral Building Official recently announced that the Cape Coral Building Department will begin strictly enforcing this rule. This means Associations should expect to receive requests from unit owners (which they should be doing already), and unit owners need to make sure they have secured the approval of the Association before pulling permits for improvements that may be outside, or appear to be outside, of the unit.

Have you ever wondered whether renting out your property using VRBO qualifies as a commercial use as opposed to a residential use? You’re not alone.

On one hand, earning income from rent, advertising for new tenants, managing and scheduling those tenants, and maintaining the property to comply with the regulations required to frequently rent out your property for short periods certainly sounds like a business.

On the other hand, it’s your residence, and the people paying you to stay in it are only using it to eat, sleep, and do other ordinary acts incident to living. They aren’t using your place to produce income for themselves.

While both sides seem to have a reasonable argument, a recent Florida appellate court decided that renting a home to someone who uses the home “for ordinary living purposes such as sleeping and eating” qualified as a residential use under that particular association’s governing documents. See, Santa Monica Beach Property Owners Association v. Acord, (Fla. App., 2017).

As 2016 closes, we reached out to our team and asked them to share some of the most notable issues in real estate and land use & environmental law:

Residential Closing Best Practices Requirements by Amanda Barritt

2016 saw the CFPB regulations and Best Practices requirements move into high gear with respect to financed residential closings. Lenders, attorneys, and title companies have invested a lot of time and money coming into compliance. However, the results of the national election, along with the ruling in the case, PHH Corporation v. CFPB, are causing these players to question whether any, or all, of the CFPB lending regulations will be done away with. For now, Melissa Murphy, Senior Vice President and General Counsel of the Attorney’s Title Fund, suggests slowing down on making significant investments in Best Practices, while continuing to make sure to comply carefully with RESPA, Section 8(c) requirements as to affiliated business arrangements until we see what happens in 2017.

Condo & HOA: Fire Sprinkler Retrofitting by Molly Maggiano

As the year winds down to an end, the opportunity for condominium associations to opt-out of fire sprinkler retrofitting is also coming to a close. The subject of fire sprinkler retrofitting proved to be a hot topic during the course of the year, due in part to communications put out by the Florida Division of Condominiums regarding the applicability of the obligation to retrofit, which left many associations who thought they were exempt confused as to whether they were subject to retrofitting, whether they should conduct an opt-out vote, and the implications of such a vote. This resulted in an abundance of frantic calls to association attorneys who were also dismayed and left to wonder whether the Division would clarify its statement. Thankfully, the Division did correct its communications, but the ordeal emphasized the importance and benefits of having a qualified association attorney on hand in crucial situations such as this.

2016 Significant Foreclosure Decisions by Shannon Puopolo

Foreclosure filings continued to decline in 2016. Notwithstanding, some significant foreclosure decisions came out this year. Below is my “Top 3” List:

The Florida Supreme Court affirmed the decision of the Fifth District Court of Appeal in Bartram v. U.S. Bank, N.A., holding that where an initial foreclosure lawsuit is dismissed by the court, such dismissal does not trigger the application of the 5-year statute of limitations, which would otherwise preclude a lender from filing a second action. Rather, the court held the lender is only prevented from suing on installment payments that are more than 5 years old.

The Eleventh Circuit Court of Appeals held in Failla v. Citibank, N.A. that where debtors file a statement of intent to surrender their residence in Chapter 7 bankruptcy, they must also waive any defenses or counterclaims raised in a pending state court foreclosure action.

The Fourth District Court of Appeal held in Ober v. Town of Lauderdale-by-the-Sea that the lis pendens statute does not discharge liens that are recorded and based on conduct which occurs after the date of the final judgment of foreclosure, even if such liens attach to the real property prior to the date of the foreclosure sale.

Land Use Law by Austin Turner

It was an exciting year for land use and environmental law at both a state and local level. On January 21st, CS/CS/SB 552 was enacted to comprehensively address issues such as Everglades restoration. In response to threats like the Lake Okeechobee algae blooms and the Zika virus, the Governor declared several States of Emergency which led to permit extensions. Recently, a supermajority of Florida voters approved one of the two renewable energy measures establishing a constitutional ad valorem tax exemption for solar power. Locally, Lee County residents approved a non-binding referendum for Lee County’s land acquisition and stewardship program, “Conservation 20/20.”

On behalf of the Real Estate and Land Use team at Henderson Franklin, we wish you and yours a very Happy Holiday season and New Year. Please enjoy our 2016 e-card benefitting the Golisano Children’s Hospital of Southwest Florida:

Association boards frequently ask what recourse they have against owners who fall behind on paying assessments, or violate other provisions of an association’s governing documents. While most associations’ governing documents provide for the right to fine owners and place a lien on their property, not all boards are aware that they may also suspend owners’ rights to use common elements or facilities.

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About this Blog

Since 1924, the real estate and land use attorneys at Henderson Franklin have offered our clients guidance in matters of transactional real estate and development, community association law, real estate litigation, eminent domain, land use and environmental law.

ABOUT THE REAL ESTATE PRACTICE

Since 1924, the real estate and land use attorneys at Henderson Franklin have offered our clients guidance in matters of transactional real estate and development, community association law, real estate litigation, eminent domain, land use and environmental law.

About the Land Use Practice

Attorneys in this practice area represent both private and public interests in matters of land use and environmental law, permitting, zoning, litigation and related legal matters.Read More